Readers Respond

By

On Washington, responsibility and the budget

“As the leader of the largest building materials and construction services company in the West, we operate one of the hardest-hit markets, and one that has yet to see the benefits of the ‘economic recovery.’ With the housing market still struggling, our industry has mirrored the larger problems facing the U.S.: threats from global competitors, underinvestment in technology, etc.

“Along with others in the industry, our company has certainly seen its share of difficult times over the past two years, but our management team has consistently communicated how the company will weather this storm and emerge even stronger from it. But, just as we preach internally to our team, we will control our future, not let the market dictate our course or hope a housing recovery bails out underperformers.

“At BMC, we tell our customers how we have reengineered the company to survive and thrive in this economy. Pro contractors expect value-add distributors to run efficiently and not over-leverage, or lose money year after year. Most effective distributors, when faced with adversity, construct a plan of immediate action when the market softens.

“Washington could use some lessons from our industry. Well-run businesses lead with a plan that targets cost and margin metrics. In the absence of a ‘live within the means’ plan from Congress or the White House, no one knows the targets and no one is held accountable. The result is a disabling deficit reduction course, which robs the current and future generations. There has never been a better time for bold actions, with sacrifices across the board, in order to right our ‘federal ship.’ Inaction or continuance of doing things the same way as the year before is ignorance on all levels.

“So what can both parties of Washington leadership learn from the home channel distribution business? Plenty. Those who lead and those who survive will be those who construct a plan, adhere to fiscal responsibility, and whose customers depend on them to remain healthy and well capitalized. We balance our checkbooks; Washington should as well. BMC is on a path back to prosperity and growth because we took the hard decisions and set achievable targets. In that sense, our core principles and values remain very much red, white and blue.” — Peter Alexander
CEO
BMC
Boise, Idaho

“It disgusts me how our national politicians act and spend our money. The $38 billion was nothing to cut — a pathetic effort to correct previous run-away spending. The U.S. economy is like the Titanic. We haven’t hit the iceberg yet, but it’s visible through the fog.” — Mike Uhl
Fatal Funnel Inc.

“Partisan political grandstanding with the common good at stake can’t be very positive! It really makes you wonder what is going on inside the Beltway.” — Richard Freund

The National Association of Home Builders is among the industry groups lining up against a planned 20% down payment rule for qualified residential mortgages. Here’s what we heard from readers.

“I believe a 20% down payment would end up making a much healthier housing industry in the long run.” — Tim Stine
Stine Lumber

“This will have a negative impact on absorbing the extra houses on the market from foreclosures. It would seem to me that a smaller down payment with better due diligence by the lender in verifying income and real credit history from willing buyers would be a better way to go.” — Ira Swartz

“I’m certain the NAHB would prefer 0% down payment — but we’ve been through that scenario and we are still trying to crawl out from under it! A 15% to 25% down payment is not unreasonable if you’re the one financing the balance of a mortgage.” — Paul Siegel

“At this point anything done drastically will have negative effects. Obviously we all need the housing market to heal and be strong. I also feel that first-time home buyers need a way to start, and setting a 20% equity qualification will delay if not eliminate the opportunity for many to buy a home. I think diligent credit checks will do this. Banks for years lent money on a person’s credit and ability to pay; it was only when government placed emphasis on everyone owning a home that things went wrong. Not everyone is meant to own a home; it should be an example of a person’s responsible discipline.” — Rob Latham
Tri-State Forest Products Inc.

“I think that if due diligence had been followed in the past and we hadn’t loaned money to people who didn’t even have jobs, then the housing market wouldn’t have crashed in the first place. By doing what we did, we over-inflated the value of homes by creating a false demand. Just check to ensure borrowers are in fact credit-worthy.” — Vicki Worley